A few weeks ago the WSJ reported that “U.S. homeownership rate fell for a second straight quarter, as high prices and limited starter-home inventory are steering more households toward renting.”  This coupled with the fact that home prices rose over the last 2 decades while wages have remained stagnant (see chart below) confirms that we are living in a rental economy.

Although the economics of wages, home prices, and supply drive many hopeful homeowners into renting, others prefer renting for mobile flexibility, lack of debt, and access to amenities and advantages that they may not otherwise have in a single family home.

In Freddie Mac’s recent survey of renters and homeowners, 82% of renters stated that renting is more affordable for them (see chart below). This percentage has steadily increased from 69% in January 2016, further affirming the idea that the rental economy is here to stay.

A recent Miami Herald article, written by Ricardo Mor, pointed out that there are 83.1 million Millennials and a whopping 30 percent of them live at home with their families. This is an incredible statistic, especially for investors considering investing in multifamily real estate.

These 18-to-34-year-olds are historically our apartment dwellers, taking their first steps toward independence. Instead of moving into their first home post college graduation, they are still living at home.
Do the math: that’s almost 25 million young people – potential apartment renters who haven’t entered the rental market yet. The pent-up demand is huge and increasing. New construction cannot keep up, but even then, it is far too expensive for the entry level worker or new college grad.

That’s exactly why Lloyd Jones Capital is acquiring existing apartment complexes and re-branding and improving them in order to accommodate this exploding demographic that represents one-quarter of our nation’s population.

Paying attention to these real estate trends will move you to diversify your portfolio investment with multifamily real estate. Our investment strategy of finding, purchasing and remodeling C Class rentals is a great way to secure modern apartments for millennials while still creating a significant return for our investors.

Christopher Finlay is Chairman/CEO of Lloyd Jones Capital, a private-equity real-estate firm that specializes in the multifamily sector. With 35 years of experience in the real estate industry, the firm acquires, manages and improves multifamily real estate on behalf of its institutional partners, private investors and its own principals. Headquartered in Miami, the firm has operations throughout Texas, Florida and the Southeast. For more information visit: lloydjones.wpengine.com.